What is behind our Galaxy's falling share price?, page-802

You are so right Gekkko about the manipulation.  The following are some examples:

·        Constant selling pressure to maintain an artificially low share price.

·        Placing low sell bids which are then pulled as the price gets near.  The purpose of this is to scare other holders into selling at a lower price.  

·        Large after trade sells which push the daily low a cent or two below the close price.

·        High levels of cross trades.

 

There are many manipulation tools available to the institutional shorter that are not available to the normal share trader:

·        The ability to trade small numbers of shares.  All day we have examples of a single share being sold to bring the price down a cent or so.

·        The ability to buy or sell at prices not available to retail traders – e.g. you put in an order to buy at 2.15 when there is a seller at 2.16, only to see them taken out at 2.155.

·        Passing the parcel – where bundles of shares are simply transferred between different nominee accounts (X-trades)

·        Stacking the sell side with fake orders at prices that are not accepted from the general public, and which cannot even be seen on trading platforms like Comsec and ANZ Share Trading.  An example is that GXY at one time had 2m shares listed for sale at $12.  Makes the board look like it is overweight with sellers.  Last week there was another instance where there were 350,000 shares for sale at $12.

·        In relation to fake orders, there was an instance last week where some huge sell orders were placed with a few minutes to go before the end of trading, with the intention of panicking others into selling a few pips lower.  Then they were pulled as value buyers rushed in.  This happened again yesterday when a few minutes before the end of trading there was an order placed for the sale of over 550,000 shares at 1.94, only to be pulled a minute before closing. 

·        The ability to sell large numbers after trade.  

 

This manipulation is unethical for lots of reasons:

·        There are people who have taken margin loans to buy shares in something that is fundamentally sound, that are forced to sell at a loss when those loans are called in.

·        There are people who have bought their shares with their own money, only to see them sold as the price is pushed down to trigger stop losses.

·        The impact this must be having on Superannuation Investment Accounts.

·        It may encourage a mindset where people see shorting as a viable way to make money on the ASX.  These people will think there must be a good reason why GXY is the No. 1 shorted stock on the ASX (there is no good reason), and they will be encouraged by the negative analysis put out by some of the big investment banks.  These are the people who the manipulators are relying on to take the loss when the market turns.   They will be left high and dry with infinite losses.   

 

It is a pity the Royal Commission into the Banking and Financial Sector did not also investigate the ASX because I believe the improprieties by the banks and insurance companies would pale into insignificance compared to what the big investment banks (mostly US) get up to here.  Their actions are transforming the ASX from a vehicle which Australians should be able to rely upon as a means of wealth creation into something more akin to a casino. In particular, it is being used by investment banks as a mechanism for ‘stealing’ the wealth of ordinary Australians.

 

I once thought shorting had its place, but now believe it should be banned entirely as occurred in the U.S., Britain, France, Germany, Switzerland, Ireland, Canada and Australia following the 2008 financial crisis.